In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim initially filed in September 2009, Boushy North Investments, Ltd., sought $3,872,555.07 in compensatory damages, $4 million in punitive damages, and costs as a result of Respondents' negligence; gross negligence; breach of fiduciary duty; and unauthorized trading. Claimant alleged that Respondents failed to prevent an unauthorized and unsuitable day-trading strategy for Claimants' family limited-partnership account. At the arbitration hearing, Claimant amended its actual/compensatory damages to a range of $1,700,000.00 to $3,700,000.00 in addition to a request for costs; but withdrew its request for exemplary/punitive damages and attorneys' fees.

Respondent Penson generally denied the allegations, asserted various affirmative defenses, and filed a Third-Party Complaint against Second Mile and Thomas Cooper. The Third-Party Complaint asserted causes of action of indemnification; breach of contract; and fraud related to Third-Party Respondents' alleged material misrepresentations about the trading and the direction of all of the trading in Claimant's account.

Second Mile Wealth Management, Inc. generally denied the allegations made in the Third-Party Claim and asserted various affirmative defenses.

Jockeying for Position (and jurisdiction)

In April 2010, Thomas Cooper indicated that he would not submit to FINRA's jurisdiction or participate in the hearing. Cooper was not a member/associated person of FINRA and, as such, the FINRA Arbitration Panel made no determination regarding him.

On or about April 20, 2011, Penson Financial Services, Inc. dismissed its Third-Party Claim's cause of action for fraud.

On or about April 25,2011, Second Mile Wealth Management, Inc. indicated that it would not attend the hearing but did not object to the hearing going forward.

AWARD

The FINRA Arbitration Panel found Respondent Penson liable to and ordered it to pay to Claimant $500,000 in compensatory damages. The Panel characterized Penson's Third-Party Claim as effectively withdrawn because Penson "failed to assert or argue its Third-Party Claim."

BILL SINGER is a lawyer who represents securities-industry firms, individual registered persons, Wall Street whistleblowers, and defrauded public investors. For over three decades, Singer has represented clients before the American Stock Exchange, the New York Stock Exchange, the Financial Industry Regulatory Authority (formerly the NASD), the United States Securities and Exchange Commission, and in criminal investigations brought by various federal, state, and local prosecutors. He has the distinction of representing witnesses during Congressional investigations. In 2015, Singer achieved a significant award in excess of $1 million from the Securities and Exchange Commission on behalf of a whistleblower client.

Singer is presently Of Counsel to a law firm and the publisher of the BrokeAndBroker.com Blog, which was rated as one of the industry's top eight destination websites and the leading legal/regulatory blog by "Investment News."

Before entering the private practice of law, Singer was employed in the Legal Department of Smith Barney, Harris Upham & Co.; as a regulatory attorney with both the American Stock Exchange and the NASD (now FINRA); and as a Legal Counsel to Integrated Resources Asset Management. Singer was formerly Chief Counsel to the Financial Industry Association; General Counsel to the NASD Dissidents' Grassroots Movement; and General Counsel to the Independent Broker-Dealer Association. He was registered for a number of years as a Series 7 and Series 63 stockbroker.

Singer regularly appears as a commentator on television and radio, and is frequently quoted in the press. He is an outspoken critic of ineffective regulation and an advocate for economic and political sanity.